Indian Rupee Turning ‘Outright Bearish,’ Morgan Stanley Says

Morgan Stanley is “poised to turn outright bearish” on India’s rupee on signs the economy is slowing and as a technical chart signaled the currency may be poised to weaken.

The rupee’s economic fundamentals are deteriorating as growth slows, the balance of payments declines and because monetary policy may not be sufficient to temper inflation, Hong Kong-based strategists Stewart Newnham and Yee Wai Chong, wrote in a research report today. Morgan Stanley’s outlook for the currency may be more “negative” should the central bank refrain from raising borrowing costs next week, they said.